VietNamNet Bridge – People, who buy houses, cars and valuable assets, would have
to make payment through banks, not to pay in cash.

Striving for a “non-cash economy”

The State Bank of Vietnam, which is drafting a government’s decree on making
payment in cash, has decided to take a step forward in implementing the plan
aiming to a non-cash economy. The draft decree says that people must make
payment via banks for the car and house transactions.

Despite the great efforts to improve the payment methods, cash still has been
the most popular payment method among people. A report by the State Bank of
Vietnam showed that cheques nearly have not been used, orders for payment have
been used mostly to pay for electricity and water bills, and cards have been
used just to withdraw cash from ATMs.

The report has found that Vietnamese still prefer making payment in cash in
order to avoid tax and keep the deals in secret.

Will it help?

Though agreeing that the watchdog agency needs to take actions to reduce the
proportions of non-cash payment in the national economy, economists still keep
doubtful about the feasibility of the decision.

It’ll take a long time to change the people’s habit of making payment in cash.
In 2001, cash accounted for 23.4 percent of the total broad money supply (M2).
The proportion decreased slightly by 1-2 percent in the next few years, but
remains high.

In 2008, the proportion of cash on M2 was 14.6 percent. The figure was lower at
14.01 percent in 2009, but then increased again to 14.2 percent in 2010.

The Payment Department of the central bank, the compiler of the draft decree,
itself anticipated the opposition from the public.

Cong Ly, a reader (...cam@gmail.com), said that only when the banking system can
modernize its technical infrastructure to satisfy people’s demand, should it
think of demanding payments to be made via banks.

Le Anh (leanh...@gmail.com) has warned that the new regulation would cause
troublesome to people. He commented that it is necessary to renovate the banking
system first and then force people to make payment via banks.

New decision will only feed up banks

The draft decree has also set up the cash payment service fees. At present, the
fee is about 0-0.05 percent of the total volume of cash transacted. However, the
central bank thinks that the fee is not high enough to encourage individuals and
businesses to make payment via banks.

Though banks can charge fees on the clients who make payment in cash, in fact,
most of the banks apply the zero percent fee level in order to attract more
clients.

Therefore, according to the central bank, there is a principle to follow that
one must pay fee when withdrawing cash, and the fee must be higher than the
money transfer fee.

This means that instead of the “COD” (cash on delivery) mode, people would have
to make transactions via banks and have to pay fee, even though they don’t want
to use bank services.

Some polled people have affirmed that they don’t want to use the service of
making payment via banks, saying that they do not want to waste their money.

Workers were once forced to receive salaries via their bank accounts instead of
receiving directly from cashiers. Later, they have been informed that they have
to pay fee to receive the salaries – withdraw money from ATMs. This is really an
unreasonable regulation, according to Minh Tam (minhtam...@gmail.com).